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X-FAB Silicon Foundries SE (EPA:XFAB), which is in the semiconductor business, and is based in Belgium, saw a double-digit share price rise of over 10% in the past couple of months on the ENXTPA. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on X-FAB Silicon Foundries’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for X-FAB Silicon Foundries
What is X-FAB Silicon Foundries worth?
Great news for investors – X-FAB Silicon Foundries is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €6.09, but it is currently trading at €3.82 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because X-FAB Silicon Foundries’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from X-FAB Silicon Foundries?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With revenues expected to grow by 35% over the next couple of years, the future seems bright for X-FAB Silicon Foundries. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since XFAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on XFAB for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy XFAB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.